Hoegh LNG to Return to Private Hands
Norwegian shipowner Leif Hoegh & Co announced on March 8 it had teamed up with Morgan Stanley Infrastructure Partners to buy all shares in Hoegh LNG it does not already control and delist the company from the Oslo stock exchange.
Hoegh LNG, which boasts a fleet of 10 floating storage and regasification units (FSRUs) and two LNG carriers, was taken public by Leif Hoegh in an initial public offering in 2011 that raised $175mn. A 50:50 joint venture between Leif Hoegh and Morgan Stanley is now offering Nkr 23.50/share to buy a 50.4% stake in the company back, valuing the overall enterprise at Nkr 1.82bn ($211mn). The remaining 49.6% interest is already controlled by Leif Hoegh.
The offer represents a 36% premium to Hoegh LNG's closing price on March 5 and a 32% premium to the 30-day volume-weighted average share price.
Hoegh LNG's board has recommended that shareholders accept the bid, having requested and received an opinion from Norwegian brokerage Fearnley Securities that the deal is fair value. Two thirds of shareholders will need to agree to the offer, with a special general meeting scheduled for March 30. Hoegh LNG's will also seek bondholders' approval in a meeting on March 22.
The transaction is expected to close in the first half, and Leif Hoegh and Morgan Stanley will withdraw the offer if it has not been completed by August 9.
Hoegh LNG posted a modest growth in operating income last year to $113mn, despite the impact of the coronavirus pandemic on gas markets, although its net profit came to only $146,000, owing to increased financial costs. But the crisis took its toll on the company's share price, which closed at Nkr 17.26 on March 5, before Leif Hoegh's offer was announced, down from almost Nkr 34 in January last year. The share price has been falling for years, however, from a peak of Nkr 130.50 in mid-2015.
The move by Leif Hoegh to take back control of Hoegh LNG comes weeks after private equity firm BlackRock's Global Energy & Power Infrastructure team made a bid to buy all outstanding shares in Monaco-based shipowner GasLog.
(Banner image courtesy of Hoegh LNG)